Growing labor force drives up unemployment rate

Thursday

Mar 21, 2013 at 3:15 AM

By John Nolanjnolan@fosters.com

ROCHESTER — New Hampshire’s labor force grew by almost 6,000 people between January 2012 and January 2013, the impact of which has been to push the unadjusted unemployment rate from 5.9 percent to 6.5 percent over the year. While economists regard people returning to the labor pool to seek work as an indication of growing optimism in the economy, job growth has not kept pace. Less than 1,000 jobs have been created in the same 12-month period.

In January 2012, there were 737,350 people in the labor force, and those who held jobs numbered 693,750, leaving 43,600 people actively seeking, but unable to find, work.

In January 2013, there were 743,030 people in the labor force, and those who held jobs numbered 694,600, now leaving 48,430 people actively seeking, but unable to find, work.

This pattern of labor force growth coupled with the near stagnation of job creation, and thus a higher unemployment rate, holds true in most of the counties, cities and towns across the state.

County, town and city rates

The counties of southeastern New Hampshire recorded the following unadjusted jobless rate in January 2013: Belknap County posted an unadjusted jobless rate of 6.8 percent, Carroll County was at 6.5 percent, Rockingham County was at 7.1 percent and Strafford County stood at 6.3 percent.

Rochester is typical of many communities in having to go back to early 2010 to find a higher jobless rate than in January 2013. In 2010, the rate was above 8 percent January through March, with an estimated 1,400 people out of work. This year, the estimate is just over 1,200 people. Back in 2010, though, there were actually more Rochester people holding jobs than currently, as the labor force was calculated to be above 17,000.

During this prolonged recession, many unemployed workers have become “discouraged” — the official word for people who have not actively sought work in the past four weeks. These folks, along with many others working part-time jobs who would like full-time jobs, are picked up in the state’s U-6 rate which is released every three months, and should be available for the first quarter of 2013 in mid to late April.

The U-6 rate has tended to be more than double the official U-3 rate, but if more “discouraged” workers are returning to the labor force, the expectation would be that the U-3/U-6 gap will narrow, somewhat.

On March 18, NHES also released the state unemployment rankings for January. The unadjusted table shows New Hampshire lying 12th, behind North Dakota (4.3), Nebraska (4.5), South Dakota (5.0), Vermont (5.4) and seven other (mainly Western) states. At the misery end of the unadjusted unemployment rate table, seven states have slipped back into double digits — Illinois, New Jersey, North Carolina, Nevada, California, Rhode Island and, at the foot, Mississippi with 10.7 percent. Puerto Rico languishes with a January jobless rate of 14.8 percent.